This is a passive commodity ETF that deposits physical platinum bars with a custodian and tracks the spot platinum price based on those holdings. It invests directly in a physical commodity rather than in individual stocks.

It suits investors who want exposure to platinum's distinct industrial and eco-friendly demand, which differs from gold and silver.

abrdn launched the ETF in 2010, and it is managed passively (index-tracking).

For each ETF share, a set amount of physical platinum bars is deposited with a custodian in London, and the fund tracks the price using only the physical metal, with no derivative contracts. Because of operating costs, the platinum held per share declines slightly every day.

• Direct physical holdings with no derivative contracts
• Pure platinum exposure tied to industrial and eco-friendly demand

Assets under management (AUM) stand at $1.7B, and the expense ratio is 0.60% per year.

Just as similar precious metal ETFs GLD and IAU hold physical gold, PPLT holds physical platinum directly. Its fees are somewhat high among precious metal commodity ETFs, but it is one of the physical platinum ETFs with relatively good liquidity.

Platinum reacts sensitively to automotive catalyst demand and expectations for growth in the hydrogen economy. The pace of the shift to electric vehicles and the adoption of fuel cell technology influence the medium- to long-term price direction, while in the short term, price swings follow dollar strength or weakness and supply uncertainty.

Even when money flows into precious metals broadly, platinum is a smaller market than gold or silver, so its inflows are relatively modest. Interest tends to rise on expectations of industrial demand when hydrogen and decarbonization policies are strengthened.

Its strengths are direct exposure to physical platinum and diversification benefits, while its weaknesses are low liquidity and the risk of swings in industrial demand.

GLD and IAU, shown in the table, are large ETFs that track physical gold rather than platinum. They belong to the same precious metals category as platinum but have a different demand structure. GLDM is a low-fee gold ETF, and SGOL is a gold ETF with storage in Switzerland. Direct platinum substitutes include SPPP, which likewise holds physical platinum, and the smaller PLTM. For physical silver exposure, you can consider SLV or SIVR.

Here is what to check before investing in PPLT. Given the nature of a physical commodity ETF, you should review accumulated fees, liquidity, and currency effects in advance. Changes in platinum's distinct industrial demand structure also require ongoing monitoring.

The platinum market is smaller than the gold and silver markets, so short-term volatility can be large. If faster EV adoption reduces demand for internal combustion engine catalysts, it could create a structural headwind, and the concentration of mine supply is also a driver of price swings.

This is a product you can choose when you want direct exposure to physical platinum. Because the market is smaller than for gold and silver ETFs, consider using it as a small satellite position, and decide whether to enter after weighing fee and liquidity costs.